Research and Development Activity as a Growth Factor of Foreign Owned SMEs in Selected Central And Eastern European Countries

This paper aims to explore the role of R&D activity as a factor of growth of foreign owned SMEs in selected Central Eastern European countries (Croatia, former East Germany, Poland and Romania). The paper is based on the micro-level approach, i.e. it focuses on the characteristics of foreign owned SMEs in the selected countries where the population of foreign owned SMEs in each country is divided into two groups. The first group consists of the firms that have achieved high growth, and the control group consists of the remaining firms. Our empirical analysis is based on the postal survey of foreign investment enterprises in manufacturing in the selected countries. All the surveys took place during the year 2006 and April and May 2007. The results show that foreign owned high growth SMEs in the analyzed countries demonstrate a tendency for R&D cooperation primarily with other firms (suppliers and customers), whereas low growth show inclination toward R&D cooperation with other unit of MNE and in case of former East Germany, this finding is statistically confirmed using chi-square tests. In the context of R&D activities as a knowledge source for high growth SMEs R&D activities and innovation activities, it is stressed the importance of R&D cooperation with local suppliers and customers is relatively more important in comparison to existing knowledge of MNE and R&D cooperation with scientific organization